BusinessDay

Rising insecurity deters agricultural investments

Olanrewaju Saheed (not real name), a 35-year-old Katsina-based farmer moved in 2020 to Chitimu village in Abuja, under Gwagwalada area council which shares boundary with Niger State.

He shut down his farm production and marketing business that sits on 60-70 hectares of land as terrorists threatened his existence.

“Some of our farm labourers resigned on account that they were being threatened. We had to part with some percentage of our products regularly as a way to acknowledge terrorists; more and more frequent requests meant that if obliged, production cost may not even be recovered, and we were being strongly advised to stop going to the farm so we do not get kidnapped,” Saheed said, in a response to questions.

Besides, the conflict situation in the country throws existing agribusinesses in disarray, and deterrence of new investments in the sector is inevitable despite its potential.

The country’s efforts to cut imports by boosting local production remain stalled on the back of rising insecurity as farmers flee farmlands to seek safety. Tons of investors have walked away from huge investments, prioritising their safety above their losses.

Saheed told BusinessDay that if he were to take stock of his losses, he certainly would not be counting in thousands. “For me, it’s not about quantifying it, it’s about being alive to do other things,” he said.

According to experts, the situation is currently discouraging investments and will continue to, if not remedied.

A 2019 study titled ‘Agricultural production amid conflict: Implications for Africa’s regional development’ found that conflict imposes huge anti-development costs on Africa. The study identified one of these costs to include discouragement of investors.

Read also: Nigeria’s agric shows strength in H1 despite escalating insecurity, Russian-Ukraine war

Others, it noted, are high death tolls, reduced agricultural productivity, outmigration, displacement of populations, exposure to diseases, endangerment of women’s and girls’ lives, collapse of social order, looting, suspension of education, unemployment, food insecurity, high price of foodstuffs, and lack of effective social institutions for conflict resolution, among others.

Rising insecurity is a major risk that cannot be shoved aside when making investment decisions in Nigeria’s agricultural economy. This was Edobong Akpabio’s take, chairperson, Agriculture and Allied sector group, Lagos Chamber of Commerce and Industry (LCCI).

In an interview with BusinessDay, Akpabio said it will not be correct to say investors are totally leaving the sector. “We are still having even new investments, but what is happening now is that they have to provide for mitigation of their investment risks,” she said.

In some mitigation instances, stakeholders are required to create some level of fencing for a production activity like farming that ordinarily should not be fenced. This leaves quite a chunk of investment funds going into risk alleviation instead of going straight into the activity.

Other mitigations include deploying technologies. “We are now having CCTV in farms to be able to check all of those things,” Akpabio said, pointing out that another level of issue is law enforcement agents not being able to nab or prosecute defaulters even though a CCTV clip is recovered.

“Even my Abuja farm now is very close to Niger State and is not safe anymore. I am still in agribusiness because it’s what I’ve been doing as a passion for years. But from next year, I am just going to shut down everything and focus on something else,” Saheed said.

Data from the statistics office show that the capital imported into the agriculture sector in the first quarter of 2022 dropped 97.3 percent to $1.76 million from $66.40 million in the first quarter of 2021.

As the supply of even basic staple foods increasingly falls short of an ever-growing demand from the estimated 200 million people in Africa’s largest economy, experts have said that the country may be unable to control the increasing surge in food prices unless the insecurity menace is curbed.

“Agriculture—including crop farming and livestock rearing—and trade are the sectors hardest hit by farmer-pastoralist conflict,” Mercy Corps, a global humanitarian agency saddled with the responsibility of improving lives in the world’s toughest places, said in a study.

The study titled, ‘The economic costs of conflict and the benefits of peace: Effects of farmer-pastoralist conflict in Nigeria’s middle belt on state, sector, and national economies’ also found that reductions in farmer-pastoralist conflict are worth up to 2.79 percent of Nigeria’s officially reported GDP annually.

“The federal and state governments should support livelihood restoration for farmer and pastoralist communities devastated by violent conflicts. Integrated interventions may include joint economic initiatives across conflict lines, youth capacity development, and financing and investments in soil and pasture rehabilitation,” it added.

Though fingers point to the Covid-19 pandemic and the crisis between Russia and Ukraine, analysts say that if we do not resolve our internal insecurity crisis, we will not get anywhere, because the more the menace spreads, the fewer farmers there will be.

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